diff --git a/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalProjectOptionsProvider.kt b/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalProjectOptionsProvider.kt
index 1e9ca678be60..2ca6168dcd5e 100644
--- a/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalProjectOptionsProvider.kt
+++ b/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalProjectOptionsProvider.kt
@@ -68,7 +68,7 @@ class TerminalProjectOptionsProvider(private val myProject: Project) : Persisten
         }
       }
 
-      return currentProjectFolder()
+      return directory ?: currentProjectFolder()
     }